Financial Management - Study Mode

[#691] The focal point of financial management in a firm is _________.
Correct Answer

(C) the creation of value for shareholders

Explanation

Solution: The focal point of financial management in a firm is the creation of value for shareholders.

[#692] Markowitz's main contribution to portfolio theory is___________.
Correct Answer

(D) insight about the relative importance of variances and co variances in determining portfolio risk

Explanation

Solution: Markowitz's main contribution to portfolio theory is insight about the relative importance of variances and co variances in determining portfolio risk.

[#693] Owning two securities instead of one will not reduce the risk taken by an investor if the two securities are______________.
Correct Answer

(A) perfectly positively correlated with each other

Explanation

Solution: Owning two securities instead of one will not reduce the risk taken by an investor if the two securities are perfectly positively correlated with each other. The term "security" is a fungible, negotiable financial instrument that holds some type of monetary value. It represents an ownership position in a publicly-traded corporation via stock a creditor relationship with a governmental body or a corporation represented by owning that entity's bond or rights to ownership as represented by an option.

[#694] The market price of a share of common stock is determined by ___________.
Correct Answer

(D) individuals buying and selling the stock

Explanation

Solution: The market price of a share of common stock is determined by individuals buying and selling the stock. The market value per share or fair market value of a stock is the price that a stock can be readily bought or sold in the current market place.

[#695] Dividend expected on stock during coming year is classified as
Correct Answer

(B) expected dividend yield

Explanation

Solution: Dividend expected on stock during coming year is classified as expected dividend yield. Dividend yield ratio is a measure of the productivity of your investment.